The Operating Mechanism Research Of China-ASEAN Free Trade Area

Since the plan of China-ASEAN Free Trade Area (CAFTA) coming out, thebilateral trade between China and ASEAN countries has developed rapidly. Atpresent, ASEAN has become China's fourth largest trade partner. However, thebuilding of CAFTA has not got substantial progress as the bilateral economy andtrade cooperation in recent years. How to perform well to all CAFTA members andwhat kind of system and operational mechanism to be most effective in promotingthe CAFTA building are pressing issues to all CAFTA members in promoting theprocess of CAFTA building in the face of difference on trade structure, industrialstructure, economic development potential and personnel training , etc. The currentresearches about CAFTA mainly focused on the prospects and obstacles to CAFTAbuilding, the economy complementarity and competitiveness and also theintra-industry trade between China and ASEAN countries and these researches evengot conflicting conclusions. These studies only selected the representative membersof ASENA but not all. Therefore, it is of great significance for promoting tradeliberalization and CAFTA construction to study the operating mechanism of CAFTAtaking the 10 ASEAN members as a whole on the base of comprehensive research onFree Trade Area. In this process, it is necessary to clarify the impact factors and theirdegree that affect the bilateral trade between China and ASEAN countries and doempirical analysis to them. This is the microeconomic base to study the operatingmechanism of CAFTA. The operating efficiency of CAFTA reflects its operatingmechanism and we need to know the factors affecting the efficiency of CAFTA andtheir degree, then draw up a more specific strategy to promote the process of CAFTAbuilding. Using the relative economy theories, we build the key performance modelfor the efficiency of CAFTA and emphasize on the analysis of the factors that affectthe efficiency of CAFTA such as China's GDP, China's FDI to ASEAN, bilateraltrade dependency, ASEAN's goods participation in the international division of labor,China's production factors exchange and participation in the international division. These analysis results give reference to the in-depth bilateral cooperation for Chinaand ASEAN countries.Taking the 10 ASEAN countries as a whole, we construct the key perform-ance model for CAFTA's efficiency and identify the bilateral macroeconomic factorsand their relationship with the CAFTA's efficiency. This is the emphasis andinnovation of this research.